Philz Coffee Cures Growing Pains With Scalable ERP Solution

Store growth is the ultimate goal of most chain retailers. The more locations you have, the more revenues you (generally) bring in. But sometimes adding new stores creates its own new challenges.

When San Francisco-based Philz Coffee determined about four or five years ago that it wanted to start adding to its base of five coffee shops in the Bay Area, first with more stores in California and eventually hundreds of locations throughout the U.S,, the retailer knew its existing enterprise systems would not support that type of aggressive growth strategy.

“There are a lot of things that are not major issues for a younger company that can become issues as a company grows larger,” said Jacob Jaber, CEO of Philz Coffee.

The Enterprising Approach
Specifically, as the company grew larger, those things included having a scalable, secure ERP system capable of managing areas such as CRM, e-commerce, accounting/finance, warehouse management, order management, procurement and sales, and HR/benefits. In addition, Philz needed easy, real-time access to most data.

Philz’ existing entry-level accounting system lacked the scalability and deeper functionality required to support its growth plans. And manual processes for tracking and replenishing inventory, reporting on sales and other metrics, and managing transactions with suppliers and corporate customers were consuming too much time and definitely not growth-friendly.

After initially identifying its enterprise technology issues and spending roughly a year and half evaluating offerings from various providers, Philz selected NetSuite’s single, integrated, cloud-based business management solution.

“It helps us leverage technology to move quickly,” said Jaber. “We have good support and quick response from NetSuite.”

Moving at the Speed of Retail
By integrating the NetSuite ERP solution with POS systems at all stores, Philz is able to track real-time transactional data and automatically deduct customer orders from inventory. A real-time business dashboard gives Philz management on-demand visibility into such key metrics as margin, customer count, average ticket, sales by store, labor costs and more, with drill-down into detail.

Philz also relies on NetSuite to simplify and speed coffee procurement from suppliers that source beans from a variety of Middle Eastern, African and Asian nations. Philz revenue has soared 400% since implementing NetSuite in May 2010, with rapid growth to 13 coffee shops in the Bay Area. And the retailer is not done leveraging the benefits of the technology.

“When we have 500 stores, the ERP solution will help us more,” commented Jaber.